The hot job market may be good for the state’s young workers, but the continuing plunge in college enrollment could have lasting consequences for Minnesota’s economy, according to the head of the state’s largest higher education system.

Minnesota State Chancellor Devinder Malhotra has been asking lawmakers for a record $350 million increase in state support for the 26 state colleges and seven universities.

System enrollment is projected to be down another 3.8 percent this school year and 31 percent over the last decade, and Malhotra said the system needs that money in order to start growing again.

College enrollment usually falls when the economy is strong, Malhotra said. But if fewer people are earning higher education credentials, that leaves fewer qualified candidates to meet the demands of employers.

“Declining enrollment severely curtails our ability to provide Minnesota the talent and workforce it needs, thus exacerbating the labor shortages and threatening the economic vitality of the state,” he told lawmakers last week.


The Legislature wants to see 70 percent of Minnesota adults holding some sort of postsecondary credential, but the current number is in the mid-50s, Malhotra said.

Besides the surplus of decent-paying jobs, the coronavirus pandemic has driven away many prospective college students. Only 61 percent of the state’s public high school graduates in 2021 enrolled in college that fall, down from a high of 71 percent in 2013.

Another problem for colleges is demographic trends in the Midwest that have shrunk the pool of prospective students.Malhotra said Minnesota State is trying to recruit more students who are underrepresented in college, such as low-income teens and people of color. They’re also looking to bring in more adults already in the workforce with job-specific training.

And they want the state to pay for new investments in student services, which would help keep more of the students who do enroll. Roughly 30 percent of the system’s first-year students fail to come back for their second year; addressing that would be “a game-changer for enrollment,” Malhotra said.

Too many schools?

A huge influx in federal funding for pandemic recovery has kept many college and university budgets afloat for the last three years, but that money is running out. At the same time, the state has an unprecedented budget surplus and could afford to take on a greater burden in higher education funding, preventing tuition hikes.

Bill Maki, Minnesota State vice chancellor for finance and facilities, said the system is in OK financial shape for now, but “we have some structural deficits at many of our colleges and universities with the federal funding going away.”

Rep. Kristin Robbins, R-Maple Grove, called Minnesota State’s enrollment declines “stunning” and suggested leaders consider closing some campuses.

“I don’t think we can invest at the level needed to accomplish the goals when we have this many campuses to spread the resources across,” she said last week.

Governor’s budget

Gov. Tim Walz’s budget recommendation calls for Minnesota State to get a $131.5 million raise in state operating funds over the next biennium.

He’s also proposed a $73 million biennial raise for the University of Minnesota system, which asked for $205 million.

The U’s enrollment has been relatively stable through the pandemic compared to Minnesota State.

Enrollment across its five campuses dropped only 2.4 percent in 2020-21 and another 1.2 percent a year later. This year, they’re down slightly, just one-tenth of a percent.

The U’s outstate campuses are responsible for most of those losses, however.

The Twin Cities campus is down the equivalent of 304 full-time students — 0.6 percent — since 2019-20, while the four smaller schools have lost a combined 1,954, or 14 percent of their enrollment.

Rochester’s enrollment is up 12 percent since the pandemic, while Duluth (13 percent), Crookston (16 percent) and especially Morris (30 percent) have taken steep losses.